A multi-supplier strategy is optimal for business, but how do you keep the operational costs down when so many creditors are involved? In this blog, we explore the single creditor model, why it’s more efficient for your company, and the other big benefits of this approach.
What is a single creditor model?
If you’ve ever had your supply chain disrupted and had to desperately scramble to find new suppliers at the last minute, you’ll know how important supply chain resilience is for your business. It ensures that, even in this state of permacrisis, your people can get hold of the products and services they need to do their jobs. It also means your team can benefit from the best prices and conditions to suit your organisation.
But managing payment processes for so many suppliers can be a huge burden on both procurement and finance teams. So, what’s the solution? Opt for a single creditor model to avoid the many problems and inconveniences of multiple creditors.
A single creditor model is where you have one account for all your orders, no matter how many suppliers you buy from. It allows you to procure a wide range of products from many different suppliers while keeping business processes lean and efficient.
How does Unite’s Single Creditor solution work?
Unite offers a Single Creditor solution to businesses procuring from the Mercateo Marketplace and additional supplier catalogues. The way it works is:
You place all your orders through us.
Those individual suppliers send all the invoice data to us, rather than to you.
We bundle all your invoices together onto one account, so you only have to deal with us.
You pay your invoice, and we take care of the rest – passing your payments on to individual suppliers.
What P2P problems does a single creditor solution solve?
If you currently deal with multiple creditors, you’ll know that managing the procurement and accounting process can be complicated and inefficient. There are a number of contributing complexities for both accounting and procurement teams that a single creditor model eliminates, including:
Complex order management
Suppliers have different ordering systems, pricing structures, catalogues, and lead times, all of which require careful navigation and extra attention.
Complex delivery of goods
Logistical challenges and supply chain disruption are exacerbated by the fact goods are delivered through various channels with different timelines. This requires careful monitoring and coordination, checking whether products arrive in good condition, in the right place, and at the right time.
Complex invoicing process
Accounting teams have to reconcile invoices with purchase orders and accurately deliver receipts, which can be more difficult when each supplier has their invoice in a different format with specific requirements, including VAT. These variations can lead to errors, disputes, and delays.
different payment methods
Payment methods and terms can differ between suppliers – from checks and wire transfers to electronic systems. One has to ensure they’re compliant with those terms and preferences.
Higher process costs
Handling all of the above results in higher operational costs for your business. There’s more documentation, administration and communication to take care of. You also run the risk of manual errors leading to late payment penalties.
What are the advantages of a single creditor approach?
Avoiding the issues mentioned above sounds good, right? Let’s take a look at the specific benefits that choosing to use a single creditor model - like the one available on Unite’s Mercateo Marketplace - bring to your business:
Enjoy a diverse supplier base
By centralising your processes with one creditor, you can still access all the products and services you need – and add additional supplier catalogues quickly and easily – ensuring supply chain diversity. At the same time, you’ll keep your business processes lean and efficient with just one account on your books. All orders, deliveries, and communication will be handled through a single channel.
Simplify invoice and payment processing
Without the need for extensive documentation and communication with multiple creditors, you’ll only have to deal with one invoicing and payment process. Unifying all your suppliers under one creditor makes it much easier to reconcile invoices with purchase orders and ensure compliance.
Cut process costs
You’ll cut out all the administration involved in dealing with multiple creditors. With a singular, standardised process you can benefit from automation, which means more efficiency and consistency – and fewer manual errors and missed payment deadlines. You’ll spend less time on reconciliation, approval, and payment processes, and more time on higher-value strategic work.
One creditor, all the possibilities
Having an efficient invoice and payment process means your procurement and accounting teams can save valuable time and resources, meeting the needs of your business. A single creditor approach, from a platform like Unite, gives you the best of both worlds – a diverse supplier base to build meaningful partnerships and a lean, efficient payments process.
Click here to find out more about our Single Creditor solution and our vetted suppliers.